Solicitors Costs Information and Client Care Code

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As stated above, the Conditional Fee Agreements (Revocation Regulations 2005) came into force on 1st November 2005. 

It has been widely hoped that this will bring an end to the technical challenges which have both clogged up the Courts and deprived receiving parties of all of their costs in many cases. 

There remains the requirement that a CFA must relate to proceedings for which CFAs are permitted, that it must be in writing and that the percentage increase must not exceed a specified limit for that class of proceedings, but the responsibility for client care, contractual and guidance matters is now dealt with by the Law Society’s Professional Rules of Conduct. 

In July 2005 the Council of the Law Society made the Solicitors Practice (Client Care) Amendment Rule 2005 which amended the Solicitor’s Costs Information and Client Care Code 1999.  It came into force on 1st November 2005 by adding the following:-

1. At the end of paragraph 5 of the Solicitor’s Costs Information and Client Care Code 1999 add:

“Client represented under a Conditional Fee Agreement (including a Collective Conditional Fee Agreement):

d) where a client is represented under a Conditional Fee Agreement, the Solicitor should explain:

(i) the circumstances in which the client may be liable for their own costs and for the other party’s costs;

(ii) the client’s right to assessment of costs, wherever the Solicitor intends to seek payment of any or all of their costs from the client;

(iii) any interest the Solicitor may have in recommending a particular policy or other funding.

2. This rule will come into force on [the date of notification of the Lord Chancellor’s approval or the date of repeal of the Conditional Fee Agreements Regulations (2000), whichever is the later].”

The fact that these requirements are now contained in the Law Society Practice Rules, rather than the CFA Regulations, may give rise to litigation about the status of the Practice Rules. 

The Court has accepted in the past, both in the Garbutt case mentioned above and also in Swain v The Law Society, that the rules have the force of subordinate legislation.  In Garbutt, of course, the Court concluded that the breach did not render the retainer unlawful and unenforceable.  The Court also considered whether failure to provide a Costs Estimate should effect the costs which a paying party was liable to pay and concluded that the breach of the code could be taken into account in certain circumstances, specifically where the costs claimed would have been significantly lower if there had been no breach. 

If the Courts take a similar view to any breaches of the revised Solicitors Costs Information and Client Care Code then there ought to be relatively few examples of where a paying party would be able to demonstrate that the breach has led to an increase in costs.